The Future of TV Advertising Global (the new name for the London edition of Future TV Advertising Forum, held earlier this month) is one of the best places to feel the pulse of the global TV advertising industry. It gives you a sense of the challenges ahead and the solutions available. Here are our key takeaways from the 2019 event.
Takeaway No.2: It’s not a question of if you follow the 60:40 rule, just how you implement it
Harnessing the vast resources of the IPA Databank and the campaign effectiveness data within it, Les Binet and Peter Field famously decided that the most effective advertising campaigns spend 60% of their budget on brand advertising and 40% on activation – whereas today many brands are skewed more towards activation. These are all-sector averages. At this event, Les Binet, Group Head of Effectiveness at adam&eveDDB, outlined how the correct balance varies by sector, and the principle that the easier it is to activate, the more you can spend on brand.
The real story is not what Binet said, but what was not said, by anyone else at this conference. Nobody challenged his work – not on the panels, not from the audience. And the organisers searched long and hard to find people who object to the Binet & Field thesis, and found just a couple who question the methodology of basing your success benchmark on studying only the winners.
This is what is happening: Binet & Field, and others who have supported their work, have won the argument. And there will be a rebalancing of budget which will lead back towards more brand spending. The only question is how it will be done – that was the debate at this London conference. We forecast that media that is good at brand building can expect better years ahead (TV, anyone?)
Direct Line Group can give the masterclass on how long-term brand building sets you apart in a sector (insurance) that lends itself so easily to activation-focused marketing but which can also be readily commoditised – a fate that has befallen some insurance companies who are now buried in price comparison sites. But it is Adidas that we should focus on, because of their size and the very public way they committed to a more digital-focused marketing strategy nearly three years ago.
At Future TV Advertising Global, Andy Pilkington, Media Director, Europe at Adidas, frankly acknowledged that the company’s strategy to drive direct-to-consumer growth led to more short-term thinking, because the marketing team had more data and they could literally see the sales happening. “Previously, when people bought in a shop, we had little visibility [of those sales]. Once it became a direct transaction, because you can see sales in the moment, there is a temptation to over-focus on that and forget about the long-term.”
Since then, Adidas has used econometrics to help demonstrate the long-term effectiveness of media, and Pilkington is a fan of the work by Binet & Field. In fact, the Europe marketing team has sent Binet & Field’s books to other parts of the company in other markets.
But this session (Effectiveness under the microscope) was partly concerned with how you actually initiate the rebalancing of brand and activation spending. Pilkington revealed how Adidas did it – once they knew this was the right approach.
Previously, the European marketing department had one team for performance media to drive ecommerce and another team for brand media, and they ended up competing for budget, with the performance team finding it easier to measure their results and so demonstrate ROI. So, Adidas merged those two teams to create a more holistic approach. Where the former performance and brand teams each had their own agency, the converged team now works with one agency, which has been employed as a long-term partner without short-term reviews. “Putting it into one agency helped us to be properly balanced,” Pilkington confirmed.
In short, Adidas has restructured its marketing to ensure balance.
Read our full list of takeaways from The Future of TV Advertising Global 2019:
Takeaway 1: Television is back on the offensive
Takeaway 2: It’s not a question of if you follow the 60:40 rule, just how you implement it
Takeaway 3: Addressable TV is coming fast, as a complement to ‘national’ ads, not as a replacement
Takeaway 4: Unification of broadcast and digital is everything – priorities No.1 and No.2 for TV
Takeaway 5: TV is an activation medium, which makes it a uniquely full-funnel offering
Takeaway 6: The real magic is data-driven, audience-based buying
Takeaway 7: The future of agencies – yes, they do have one